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The economic downturn is taking it's toll on renters as well as homeowners as more renters find housing unaffordable.

By Paul Davidson and Barbara Hansen, USA TODAY

More renters found housing unaffordable last year as incomes fell while costs increased, a one-two punch that squeezed lower-income households in particular.

Affordability for homeowners, however, was stable.

The share of renters spending 30% or more of their household income on housing costs — the threshold set by the government to determine if housing is unaffordable — rose to 51.5% from about 50% in 2008, according to 2009 Census data released Tuesday.

Renters were socked by two forces. Median household income, adjusted for inflation, fell 2.9% in 2009 as unemployment rose as high as 10.2%. Meanwhile, median monthly housing costs, including rent and utilities, jumped about 3% to $842 from $818, the data show.

"Housing affordability is being challenged by a decline in household income and by the job market," says Daniel McCue, senior research analyst at Harvard's Joint Center for Housing Studies.

The higher rental costs largely reflect a surge in demand as home foreclosures and short sales led many Americans to forgo homeownership in favor of renting, McCue says.

A small silver lining: The portion of homeowners with mortgages spending 30% or more of their income on housing costs — including mortgage payments, taxes, insurance and utilities — was 37.6%, about the same as in 2008 after rising steadily since 2002. And the median home price dropped about 6%.

The number of homeowners fell nearly 500,000 while the number of renters increased by nearly 1 million. The homeownership rate dipped to 65.9% from 66.6%. The decline came despite a tax credit for first-time home buyers that sparked more purchases, McCue notes.

Renters' strained budgets hurt the economy. By setting aside a bigger chunk of their paychecks for housing, renters have less to spend on shopping, vacations and other discretionary items. Consumer spending makes up 70% of the economy.

Renters were also more likely to be severely financially burdened last year, with 26.4% spending more than half their incomes on housing, up from 25.1% in 2008, according to McCue's analysis of the Census data. Some 9.5 million households fell into that category last year, vs. 8.8 million in 2008.

The share of renters spending 30% or more of their incomes on housing was lowest in the Columbus, Ind., metro area at 29.8%. It was highest in College Station, Texas — 68.2%.

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